Application of Dynamic Programming Model to Production Planning, in an Animal Feedmills.

Abstract

The problem of this study is that of determining the quantity of products to produce and inventory level to carry from one period to the other, with the objective of minimizing the total costs of production and the annual inventory, while at the same time meeting the customer’s demand. A mathematical model was formulated for a multi-product problem using Dynamic Programming approach. The model was solved using the solution procedure proposed by Wagner and Whitin. The results show that the minimum total cost will be achieved with production in periods 1, 2, and 4. While demand for period 3 are satisfied with inventory from period 2. The total cost of this plan is N225, 704, 210.00, which is N6, 155, 765.00 less than the existing plan.

Keywords: Inventory, Model, Periods, Plan, Cost.